Beyond Sanctions, A New American Strategy to deal with Putin

Image: President Vladimir Putin of Russia meets with former U.S. Secretary of State John Kerry in December 2015.

The spectre of Russian influence over American politics ceases to dissipate. Even after one of the most contentious presidential elections, Moscow’s interventions seem to only enlarge rather than fade away on many levels. Facetiously, C-SPAN’s online stream was interrupted for 10 minutes of footage from RT, Russia’s state-run news network, while a glitch on MSNBC had a commenter repeating “Russia” until the screen went black. More importantly, a Senate investigation into Russian activities during the campaign is continuing, while Moscow diplomats hosted a summit between Syrian rebels and the Government in Astana, Kazakhstan —Russia’s backyard where the US was uninvited. Ever since the deterioration of relations with Russia in 2013, Washington’s main policy to limit Russian aggression has been applying economic sanctions. And with a few weeks left of his presidency, President Obama announced new sanctions against Russian entities in response to allegations of interference in the 2016 Presidential election.

It was effectively a final protest in an echoless chamber, however. Europe, for example, did not rally around the announcement like it did in 2014. After three years, sanctions have been proven to be ineffective at forcing Moscow to play by international rules. Ukraine remains divided by the invasion, while Syria’s fate is effectively dictated by Moscow and its allies. And now there is evidence that Moscow meddled in the US election, and fear that the same operatives will interfere in upcoming European ones. If the goal of these sanctions were to hurt the Russian economy and its people, it was successful on some grounds. However, if the main goal was to limit Putin, these sanctions failed spectacularly because Washington failed to consider the political realities in Russia. The new president must learn from the mistakes of sticking with economic sanctions and pursue a new strategy: military pressure.

Introduced in 2014 as a protest against the annexation of Crimea, US and European sanctions did injure the Russian economy, which consequently suffered through six quarters of economic recession. Trade with European countries, which are Russia’s largest trading partners, plummeted. Economic activity with the near-abroads, Central and Eastern European countries in the former Soviet bloc, fell the most. For example, Russia’s share of exports from the Baltic countries, many of whom retains Russia as their largest trading partner, dropped “from 21 per cent in 2014 to 14 per cent last year.” Most symbolically in 2015, Poland was for the first time ever importing more goods and services from China than from Russia. Low oil prices only exacerbated this downturn. Crude petroleum is Russia’s largest export and the country’s largest companies have had to downsize as a result — for example, Lukoil, Russia’s largest oil producer, sold its gas stations in Hungary, the Czech Republic and Slovakia.

Despite the turmoil on the spreadsheets, Putin’s support in Russia remained strong. The US underestimated the forgiving nature and overestimated the political freedom of the Russian people. Putin’s approval ratings actually rose after a year of sanctions. The conundrum that the State Department did not anticipate was that the Russian people see that they need a strong leader against foreign adversaries. They are like diamonds: when compressed by Westerners through sanctions or containment, they become stronger as a unit with a strongman at the top. Now more than ever, during a time which many of the Russian public describe as a “New Cold War,” Putin fits snuggly into that role. Unlike Americans, who can easily through democratic processes ditch their leaders in times of economic crisis (Hoover, Carter, and H. W. Bush come to mind), Russians cannot and for the most part stick by a charismatic leader who promises to suffer together. Only when the public was literally starving and the leader completely lack political awareness did the Russian people finally overthrew Czar Nicholas II in 1917. In fact, US sanctions offer excuses for the economic problems of the country, when Russia is facing structural problems with corruption, infrastructure, and demographics. The Russian people, who have suffered much more for much longer, only had to tighten their belts slightly in 2014 and placed trust in their leader it was temporarily. The West’s’ sanctions regime provided Putin with an easy scapegoat for his people’s suffering.

As such, even the economic damage, which is influenced by public confidence to a certain degree, itself was buttressed. The rouble’s comeback was a clear example. Over 2015, the currency impressively reversed its depreciation trend and gained half of its losses against the dollar. Evgeny Gurvich, head of Moscow-based independent think tank Economic Expert Group (EEG), believes the reason was Russian resilience. According to his study on the impact of sanctions:

“Opinion surveys suggest that although people clearly recognised that negative developments were hitting the economy, their expectations still remained fairly positive. In spite of the two-fold devaluation of the Rouble, their confidence in the currency was generally unshaken, so that only a small share of Russians’ savings were shifted into hard currencies.”

By 2016, the currency was tracking oil prices, and was therefore recovering because the latter was also rising due to a Russia-brokered OPEC output agreement. In December of that year, the rouble became the “only major currency to appreciate against the dollar since the end of September.” This is not to say Russia’s economy is doing fine — in the long term, decreased foreign investments, a diminishing workforce, and other structural issues will catch up, as Gurvich’s paper predicts. But this recovery and the fact that political change did not foment in Moscow, shows that strategy to make political changes with economic punishments was unrealistic. Economic shifts often takes some time to be substantially felt by firms and consumers. Naturally, shifts which are not as quick and intense in burning through the system rarely can create political changes, especially in a country as stifling as Russia.

With the new American president declaring “Having a good relationship with Russia is a good thing, not a bad thing,” Washington will need to find new leverage to both maintain said good relationship and protect American interests. This means speaking the same language as the former-KGB operative: the military. President Obama may have finally cracked the Russian code in his final days in office. In January, some 3,000 US troops were sent to Poland under the banner of NATO –the first deployment at Russia’s doorstep since the Cold War. This sudden move finally got under Moscow’s skin. In response, President Putin’s spokesman Dmitry Peskov commented: “We perceive it as a threat…These actions threaten our interests, our security.” The 44th president thus left his nation at a position with good leverage against Russia.

Friendly foreign relations must not be at the expense of national interest and international standing. The new president must be vigilant against a master like Vladimir Putin, and not get personal affability get in the way of high politics. In order to protect the international order and its place, the US must solve the problems of Ukraine, the Middle-East, and continental Europe. As this time, this often entails dealing with Russia, and having some leverage would not hurt. War is unrealistic and a lose-lose, but the military option should be a major component in a new Russian strategy. After all, not all threats have to be spoken.

Matt Lam is a junior at Cornell University, studying Economics in the College of Arts & Sciences. He is most interested in U.S. foreign policy, European and British politics, and movements in the Asia-Pacific.